All cells store fatty acids in neutral lipids (triacylglycerols[TAG] & cholesterol esters) in discrete intracellular lipid storage droplets. In the general cell population, very small droplets transiently sequester fatty acids which are used for membrane biosynthesis and as a source of energy. In adipocytes, which store the main bodily energy reserves, fatty acids are mobilized from very large, TAG-rich, droplets and exported to other tissues. In steroidogenic cells, the droplets contain primarily cholesteryl esters, precursors for steroid hormone synthesis. Our research focuses on the surface composition of droplets and the mechanisms by which lipids are both deposited and hydrolyzed. We find that droplet surfaces in animal cells are coated by related proteins, the perilipins and adipocyte differentiation-related protein (ADRP). Despite its name, ADRP is expressed ubiquitously and occurs on the surface of droplets in nearly all cells examined. However,isoforms of perilipin are expressed primarily in adipocytes and steroidogenic cells. These cell types are unique in that they use a cAMP/protein kinase A (PKA)-mediated process to hydrolyze their stored lipids. Since perilipins are polyphosphorylated by PKA in concert with the lipolytic reaction, we hypothesize that these proteins participate actively in lipid breakdown. To assess the function of perilipins, we have created a perilipin null mouse by targeted disruption of the perilipin gene in murine embryonic stem cells. The perilipin null animals have greatly decreased (65-70%) adipose tissue but appear otherwise normal. Results from lipolysis studies with isolated adipocytes reveal a possible basis for the reduced adipose tissue. To wit, cells from the perilipin knock-out mice exhibit markedly elevated basal lipolysis which is 5-times greater than cells from wt animals. These findings confirm our standing hypothesis, which states that perilipin functions to protect stored TAG from unregulated breakdown by hormone-sensitive lipase, the primary TAG lipases in adipocytes. An unexpected finding was the adipocytes from perilipin null animals exhibit a dramatic loss in ability to be stimulated by agents that activate PKA, suggesting that perilipin is required to elicit the full effect of hormone-sensitive lipase, the rate-limiting enzyme in adipocytes. Additional functional studies were conducted in CHO fibroblasts, which contain lipid droplets coated with ADRP. Upon introduction of perilipin A into CHO cells, the ADRP disappears and the droplets acquire a coating of perilipin. The two major consequences of this perilipin-for-ADRP switch are: 1) perilipin strongly suppresses the hydrolysis of TAG within droplets, and 2) lipolysis becomes activatable by elevation of PKA. Since the CHO cells have no PKA activated lipase, we conclude that perilipin A alone is sufficient to confer PKA-sensitive lipolysis in these cells. Moreover, when perilipin A in which selected PKA sites have been mutated is introduced, lipolysis is still suppressed but no longer activatable by PKA. Continuing with this CHO model system, we have introduced constructs to produce HSL fused to Green Fluorescent Protein (GFP). In adipocytes, we demonstrated previously that a major consequence of PKA activation in adipocytes is the translocation of HSL from the cytosol to the surface of lipid droplet. HSL-GFP does not translocate to lipid droplets in CHO cells unless their droplets contain a coating of phosphorylatable perilipin. Thus, in adipocytes TAG breakdown results from phosphorylation of perilipin, which alters the surface of the lipid droplet and provides access for lipases to the core TAG. And, perilipin is required to induce translocation of HSL to the lipid droplet.